DryShips agrees to conduct private placement, rights offering
DryShips announced that the audit committee of the company's board of directors has approved a binding term sheet pursuant to which the company will sell the company's common shares to entities affiliated with its Chairman and CEO George Economou, for aggregate consideration of $100M at a price of $2.75 per share. Pursuant to the Term Sheet, the Audit Committee has also approved a subsequent rights offering that would allow the Company's shareholders to purchase their pro rata portion of up to $100M of the company's common shares at a price of $2.75 per share. The Rights Offering will be backstopped in full by Sierra Investments, an entity affiliated with Economou. Economou will not exercise his subscription rights in the Right Offering outside of the backstop commitment. The company will have the right to cancel the Rights Offering or amend the terms thereof. The cash proceeds from the Rights Offering are expected to be used for general corporate purposes and/or vessel acquisitions and/or to repay amounts outstanding under the Sierra Credit Facility. The consideration for the Company's common shares issued to Sierra in the Rights Offering as part of the backstop will be the repayment of amounts outstanding under the Sierra Credit Facility.